Eesti Pank allocated a quarter of last year’s profit to the state budget
- The central bank has allocated one quarter of last year’s profit, or 3.5 million euros, to the state budget
- Eesti Pank’s capital has increased by around 0.5 billion euros and the long-term goal is to increase its capital to 1.5 billion euros
- Eesti Pank’s share of the assets purchased by the central banks of the euro area for monetary policy purposes is 4.2 billion euros
The Supervisory Board of Eesti Pank decided on Tuesday to transfer one quarter, or 3.5 million, of the 13.9 million euros it made in profit last year to the state budget.
Since 1992 Eesti Pank has allocated a total of 153.3 million euros to the state budget.
The remaining three quarters of last year’s profit, or 10.4 million euros, will go to strengthening the capital of the bank. Eesti Pank’s capital has increased by around 0.5 billion euros and the long-term goal is to increase its capital to 1.5 billion euros. The central banks of the euro area have purchased a total of 1.5 trillion euros of assets for monetary policy purposes and the income and risks from them are shared equally, and Eesti Pank’s share of that is 4.2 billion euros.
Chair of the Supervisory Board Mart Laar said that “the financial risks that accompany the activities of Eesti Pank make it important for the central bank to strengthen its capital. The long-term goal of the Supervisory Board is to create a large enough reserve that the central bank would be able to help the state if problems were to arise. The Board also felt it was important to continue its current practice and set aside 25% of the profit for the state budget”.
Eesti Pank received 38.2 million euros last year in income from the joint monetary policy and currency issuing of the Eurosystem, up from 32.7 million euros the year before. Eesti Pank’s operating expenses were 19.7 million euros last year, which was some 60,000 euros less than a year before.
The net income for the year was reduced by general risk provisions of 26.8 million euros to cover risks, following the provisions in the previous year of 7.5 million euros. In deciding the size of provisions, the overall size of the bank’s reserves is considered as well as the risk assessments. In the past six years Eesti Pank has built up a risk provision of 71.8 million euros in total. Risk provisions are the first line of defence against losses on top of the reserves already held at the central bank.
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